Tuesday, December 18, 2007

What a shocker (Part 2)

UK inflation holds steady at 2.1%

UK inflation remained unchanged in November as lower utility bills offset higher petrol prices. Official figures showed the annual rate of CPI inflation was unchanged at 2.1% last month, just above the government's target of 2%. Observers say the data could give the Bank of England more opportunity to cut UK interest rates further. My family must have a very obscure shopping basket based on these figures - just had the highest ever quarterly electricity and gas bills having lived in the same house for 23 years.

Posted by jack c @ 10:04 AM (2552 views)
Please complete the required fields.



41 thoughts on “What a shocker (Part 2)

  • tyrellcorporation says:

    Official UK inflation statistics have detached from ‘street’ (actual) inflation.
    Official UK interest rates have detached from the ‘street’ (actual) interest rates.

    Central Banks are becomming irrelevant.

    Reply
    Please complete the required fields.



  • tyrellcorporation says:

    ‘The Office for National Statistics said gas and electricity bills were falling at an annual rate of 5.6%, the steepest fall since records began.’

    WTF!!! Anyone else got falling energy bills? Nope, I though not.

    Reply
    Please complete the required fields.



  • Maybe the boffins at the ONS just switched their gas and electric suppliers to the latest (time limited) special offer?

    Reply
    Please complete the required fields.



  • They are trying to keep public sector pay down, with these false measurements.

    Just as in the same way that commercial bank interest rates have detatched from BOE interest rates.

    The real danger of falsification is that the systems and checks will be insulated from the real downturn when it comes.

    Reply
    Please complete the required fields.



  • C'mon Correction says:

    Hmmmmm – 2.1% inflation you say. I think the public and the unions are starting to see this just doesn’t add up anymore – even if it did our measure of inflation (and the weightings of the items basket) is seriously flawed in measuring the cost of living in the British Isles. Another 6 months of the government issuing these irrelevant inflation reports and everyone will cease to take notice and demand 5% wage increases yoy or strike regardless.

    People are losing trust FAST with this government, they had better take note quickly.

    Reply
    Please complete the required fields.



  • waitingfor hpc says:

    WHAT A LOAD OF CRAP – COSTS ARE WAY WAY UP. NO ONE IN MY OFFICE BELIEVES THE FIGURES ANY MORE. WE WERE LAUGHING WHEN WE READ THIS!!!!

    Reply
    Please complete the required fields.



  • These figures have lost all credibilty, same as our government. I’ve just looked in the Money saction of The Mail and found the following two articles – “Food prices hit new high” and “Npower shocks with 17% price hike”

    Reply
    Please complete the required fields.



  • RPI is up to 4.3%

    Reply
    Please complete the required fields.



  • Its just government lies about inflation. I also believe growth figures are being falsified. I would not be suprised if the last two months were negative which means we could already be in recession.

    Reply
    Please complete the required fields.



  • I find it amazing that anyone has got the cheek to put their names to these figures.

    This is how a financial crisis starts…with these ”people” protecting their jobs and making it look like they are doing a brilliant job.

    The CPI now means absolutely nothing.

    Reply
    Please complete the required fields.



  • waitingfor hpc says:

    can we start a petition on here and do our own basket?

    Reply
    Please complete the required fields.



  • What is going on? Even my sons pet mice realise that prolonging the correction will only make it worse when it happens. Is our government, the BofE etc that naive to think that adding liquidity will help. It will not make the debt mountain go away, the problem is institutions, companies, private household no longer have an appetite for debt……because they are already up to their necks in it and this will not go away

    Reply
    Please complete the required fields.



  • On News Night last night the general opinion was that the BOE should cut rates hard and fast , there was no mention of the effect this might have on inflation and the fact that the BOE’s remit is to keep inflation within certain parameters.

    Reply
    Please complete the required fields.



  • Social Justice Through Housing says:

    Why is anybosy suprised. The whole housing bubble is based on a lie.

    My house costs me £300,000 6months ago; I repaint a few rooms and make an MDF fireplace (total cost £200); now it’s worth £400,000

    Stupidity and lies.

    This government has always been in on the act.

    This is not a New Jerusalem – it is a con-trick.

    Reply
    Please complete the required fields.



  • Figures can be massaged. But in the end the true figures do emerge, when it suits the powers that be. In the US the October figure was ridiculously low and then spiked up again in November. Probably happen here too when wage deals negotiated etc.

    Reply
    Please complete the required fields.



  • The figure for CPI inflation isn’t relevant when trying to determine our personal cost of living increase. Personally, I regard RPI inflation + 2% to be a more realistic figure for most of us, and this has been the case since at least the 1970’s.

    Reply
    Please complete the required fields.



  • The BoE is meant to look at future trends, not just current prices. When energy costs were really high they said base effects meant that for their forward looking purposes i.e. 12 to 24 months, prices would be weaker next year (year on year). This means that if prices for energy really did fall this time they will expect a base effect to cause them to rise in 12 months time?

    Also, with the economy slowing but wages still rising at recent trend rates, we will see a fall in labour productivity (firms won’t sack quickly but demand will weaken). This is the same as saying unit costs will go up and this is very inflationary…the BoE does not worry as long as salaries are going up at the same rate as output. Lets see if it does worry when the reverse happens. Sadly, I do not think it will.

    There always seems to be an excuse on hand as to why a cut is needed, even though the excuses used are inconsistent when the need to raise rates is obvious e.g. the current high price means that the base effect next year means prices will fall, so we can cut BUT the current low base effect does NOT mean that the base effect next year means prices will rise.

    Reply
    Please complete the required fields.



  • This link was on the same page.

    http://news.bbc.co.uk/1/hi/business/7140069.stm

    Apparently, the UK is the first country where a tightening labour market will actually ease inflationary concerns (and so allow further interest rate cuts?), rather than mean upward pressure on wage bills and so push up prices.

    Reply
    Please complete the required fields.



  • planning4acrash says:

    The RPI/CPI gap has extended by 5% because RPI is up 0.1% to 4.3%. The gap now stands at 2.2%, up from 2.1%. The gap is more than double the CPI measure. So this month actually represents an inflationary milestone, a dangerous shift that can only be overcome by doubling interest rates. Maybe we shall see another black monday. The trigger could be a massive spike in LIBOR rates. So The trend continues, undiminished. Anybody care to post the graph? I don’t know how to.

    http://www.statistics.gov.uk/cci/nugget.asp?id=19

    Reply
    Please complete the required fields.



  • who stole my pension? says:

    If the U.K. CPI is calculated as per the European standard method (which is should be) then why is the Euro zone CPI twice that of the U.K. CPI. All the factors increasing CPI are global factors (food, petrol etc). Something smells here. Is Gordon cooking the books? Can someone explain the difference?

    Reply
    Please complete the required fields.



  • planning4acrash says:

    Actually, the trigger would more likely be a falling pound. In defence of currency?! So, all we need do now is watch the currency levels to call the true end of the bull market. So long as the banks can maintain confidence in the currency the boom remains relatively intact and a soft landing remains credible. It is my opinion that there is a general asset bubble, but that it is larger than normal primarily because of the RPI CPI gap, which is a bubble in its own right, that continues to be inflated. This bubble will collapse at some point, but calling the top will be like calling the top of the housing market. No doubt it has a couple of years to run, the way that central banks are pumping it with liquidity and interest rate cuts at the moment. like any bubble it is self perpetuating and unsustainable. Keeping the CPI and RPI gap at the same level will not counteract the credit crunch, so the gap must be increased to support the market. That process should give the market support and some momentum for some time yet and the scary thing is that this process has become accepted as necessary by banks accross the world, who, by joining forces, are merely amplifying the unsustainable to yet giddier hights.

    Reply
    Please complete the required fields.



  • Planning4acrash says:

    Either that or a sign of wage led inflation, which the government is clearly concerned about with their treatment of the police.

    Reply
    Please complete the required fields.



  • Systematic fraud and lies

    Reply
    Please complete the required fields.



  • Fulhamfrankie says:

    wtf

    Reply
    Please complete the required fields.



  • george monsoon says:

    we all know that this is a BIG FAT LIE cooked up by the ONC on behalf of the government. It makes feck all difference to the fact that we are heading for a massive depression globally, and there is not a stuff that this puppet reigime will do to change it.

    I would stockpile longlife luxury foodstuffs and machine parts.

    Reply
    Please complete the required fields.



  • 2.1%!!! I can’t believe the average person is not outraged by this news. Even the RPI figures seem articifially low. My personal RPI is approximately 6%. Why aren’t people demanding reform?

    Reply
    Please complete the required fields.



  • I think the ONC must have changed where they shop from M&S food hall to Tesco Blue Stripe! And walked there!
    Sadly most people can’t seem to see past Christmas to their next credit card bill. Let alone worry about what the government spins about these days.

    Reply
    Please complete the required fields.



  • Weathly Vagrant says:

    How do these people keep a straight face?

    From what I remember, and I may be wrong, but when calculating inflation they do strange things like;

    If last year a £500 computer came with 512Mb and a 1.5GHz CPU etc, and this year for £500 pounds you get 1024Mb and a 3GHz CPU etc then they consider this that inflation on the computer has gone down by ~50%
    The same thing would apply for TVs, mobile phones etc.
    Of course the old electronic item may no longer be “compatibile” with the latest “systems”, and you’re highly unlikely to find anywhere that sells it.

    Reply
    Please complete the required fields.



  • Utter rubbish.
    CPI 2.1% yeah right, a herd of young pigs just flew past my window too.

    Reply
    Please complete the required fields.



  • speculatorone says:

    This has GB’s prints all over it, what a disgrace this country has become. You couldn’t make this rubbish up if you tried…

    Reply
    Please complete the required fields.



  • planning4acrash says:

    Since student loans are linked to RPI, this means a 0.1% (pro-rata) increase in student loan charges.

    Reply
    Please complete the required fields.



  • planning4acrash says:

    Students subsidising low cost home loans for their parents.

    Reply
    Please complete the required fields.



  • 27. george monsoon said…

    – “I would stockpile longlife luxury foodstuffs and machine parts.”

    Well I wouldn’t. History has been unkind to people who stockpile things, whether it’s crazed cults in a compound in Texas or eccentrics in the UK filling their cellars with baked bean tins. The only way stockpiling food becomes sensible is if we face Zimbabwean-style hyperinflation (+10,000%) and/or government-imposed price controls on basic foods. Alternatively if we face an oil shortage on an even larger scale than during the 2000 fuel protests, stockpiling food would become a sensible course of action. For now, spend your money on more fun things!

    Reply
    Please complete the required fields.



  • Drewster, why spend your money on more fun things, fook it, spend someone else’s (just like gordooooooon does regularly)

    Reply
    Please complete the required fields.



  • it_is_going_with_a_bang says:

    They probably lost the real figures in the post and just had to make something up quickly.

    Reply
    Please complete the required fields.



  • C’mon C’mon, cougettes are cheap and diamond solitaire rings are a bargain. I mean, I need my diamond rings, in fact I need a new one every week. I also download mobile ringtones on a daily basis. My rent is going down which is great, but my mates who have mortages are screaming mercy at present but it doesnt matter as mortgage repayments are not included i the CPI!

    Cars are cheap and so are caravans and boats, clearly all day to day requirements……What a great measure of real inflation!

    Seriously though. Rail fares and mortgage arangement fees will (sorry that is “should”) push this unrealistic index upwards in January.

    It appears this index is ridiculously selective, including rents but not mortage repayments (I understand the danger of this but ther must be some representation of home ownership mortage costs other than arrangement fees or get rid of rents, they can’t just have it one way). Vehicle service fees but not road tax etc…

    Dinners ready all this ranting is making me hungry…

    Reply
    Please complete the required fields.



  • geed said:
    >>C’mon C’mon, cougettes are cheap

    I just mulched a load of these down for fuel for the motor. Just served up Ipod and chips for the kids.

    Seriously though, the figure that is supposed to represent CPI has passed rapidly through the sublime on its journey to rediculous. Over the last few years real expendible income has shrank for just about everybody I know but this is being masked by the con that is the CPI. To suggest CPI is 2.1% is patronising at best.

    Reply
    Please complete the required fields.



  • dohousescrashinthewoods says:

    One thing to say, Gordon “@$%!*£” Brown:

    BUUUUUUUUUUUUUUUUULL [email protected]

    Reply
    Please complete the required fields.



  • Just one example of the lie that is CPI –

    Inflation hits pensioners and middle class –

    “Living costs for many pensioners rose by 7.7% in the year to April, compared with the consumer price index inflation figure of 3.1%, according to figures produced by Capital Economics.

    Meanwhile, middle-class families inflation is running at 7.4%, caused by significant increases in education costs and university tuition fees.”

    http://www.digitallook.com/news/1288658/Inflation_hits_pensioners_and_middle_class.html

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>